How the depreciation is calculated
The calculator compounds the rate: value = price x (1 - rate)^years. A 15 per cent annual rate leaves 85 per cent of the value each year, so the loss shrinks in cash terms as the car becomes cheaper.
The average loss per year is the total loss divided by the years. The first-year loss is the price multiplied by the rate.
Worked example
A £30,000 car losing 15 per cent a year is worth £18,423.75 after three years. That is £11,576.25 of depreciation, or about £3,858.75 a year on average, and 61.4 per cent of the original price is retained.
These figures follow the rate you enter, not a market valuation. Change the rate to test a different assumption.
Why a single rate is only a model
Real depreciation is steepest in the first year and flattens later, and it depends on mileage, condition, specification, colour, fuel type and local demand. A single compound rate cannot capture that.
A car that holds its value unusually well, or one in a segment under pressure from new prices, can move far from any smooth curve. Use the rate as a planning assumption, not a prediction.
Limits of this calculator
It does not use trade values, auction results or market data, and it ignores finance charges, insurance, servicing and tax. It also ignores a write-off or a major repair.
It does not use trade values or market data. For a value based on comparable asking prices, a dedicated valuation tool is the right comparison, not a depreciation curve.
For the same arithmetic in the other country's currency, use the US car depreciation calculator.
Inputs for the car depreciation calculator
Purchase price
What you paid, including options, before any deposit or finance charges.
Annual depreciation rate
The share of value lost each year. Enter the rate you want to test.
Years held
Whole years from purchase. Enter 0 to see the starting value.
CALCULATOR QUESTIONS
Car depreciation calculator UK questions
What rate should I use?
There is no universal figure. Test two or three rates to see how sensitive the answer is, rather than trusting one number.
Why is the first year the most expensive?
New cars lose the most value as soon as they are registered, before any wear or mileage matters.
Does mileage matter?
Yes, and this calculator ignores it. A high-mileage car depreciates faster than the rate alone suggests.
Is this a trade-in value?
No. It is an arithmetic estimate from your price and rate, not an offer from a dealer.